ECONOMICS
ECONOMIC GROWTH
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Lack of government intervention
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Negative impacts on employment
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Undervalued exchange rates
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Improvement in the balance of payments and debt position
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Detailed explanation-1: -The excessive application of Import substitution will lead to overvalued exchange rates. This policy backfires so often because it creates monopolies within the domestic market. This further results in unfair income distribution.
Detailed explanation-2: -Import substitution policy is a set of measures aimed at stimulating the production and competitiveness of domestic goods to increase domestic demand and optimize the demand for imports. It is determined by the need to reduce the dependence of the transitive economy on economic leaders.
Detailed explanation-3: -The study has found that bureaucratic red tape, the difficulty to get well trained labor, technological inferiority, shortage an frequent interruption of electric power supply are found to be the major challenges of import substitution industrialization.